CREDIT unions still have a major part to play in Redcar and Cleveland, councillors were assured - despite the recent collapse of one.

As reported, the Financial Services Compensation Scheme (FSCS) is stepping in to protect more than 800 members of Redcar and Cleveland Money Tree and Glen Credit Union after it was wound up on October 24.

The 800 savers had around £200,000 with the credit union but their money is protected by the FSCS. People with up to £1,000 will receive a letter to get cash over the counter at their Post Office while anyone with more than £1,000 will get a cheque. Most payments should have been made by Friday. (oct 31)

FSCS spokesman Mark Oakes said: “FSCS is protecting Redcar and Cleveland Credit Union members. We’re ready to help - your savings are safe.” With payments of up to £85,000 available, he stressed that every member of the credit union was protected.

And despite the collapse, Redcar and Cleveland Councillor Lynn Pallister told the latest Cabinet meeting she still had faith in credit unions.

She said: “Yes, we have lost this one, but we haven’t lost credit unions and I think there’s a massive future for them.

“There is a will to develop credit unions. There might be a blip from time to time, but I’m positive there is a future for them, especially with the impact of welfare reform and the poverty we are seeing.

“Yes we have to have local credit unions but we have to start thinking how we can develop them properly as community banks.

“We may have to think of something along the lines of a Tees Valley credit union, while not taking away local provision.

“In the long term, we have to look at credit unions more seriously.”

Cllr Pallister, Cabinet member for housing and neighbourhood renewal, was speaking as the Cabinet voted to endorse a “statement of intent” by the Association of North East Councils to develop and support credit unions.

The Cabinet also heard that the Redcar high street Moneywise shop, opened recently as part of the council’s credit union commitment, had sold £7,000 worth of goods and enlisted 35 new members in its first week of trading.